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State of the Union: Obama makes the right noises on clean energy

25 January 2012

What did President Obama say to excite the renewables industry during his 2012 SOTU speech?

Those in the renewable energy industry looking for clues as to whether President Obama would continue to talk up renewables will not have been disappointed by his 2012 State of The Union speech. Here is a run down of what was said as it relates to some of the hot energy topics in the country...

Competitiveness

Obama called for "a future where we’re in control of our own energy, and our security and prosperity aren’t so tied to unstable parts of the world..."

And he said now was an ideal time to set things in motion on U.S. manufacturing: "long before the recession, jobs and manufacturing began leaving our shores [...] so we have a huge opportunity, at this moment, to bring manufacturing back. But we have to seize it."

China

Obama said he would not "stand by when our competitors don’t play by the rules. We’ve brought trade cases against China at nearly twice the rate as the last administration [...] it’s not fair when foreign manufacturers have a leg up on ours only because they’re heavily subsidised.."

He announced the creation of a Trade Enforcement Unit that will be charged with investigating unfair trading practices in countries like China. And he promised more inspections to prevent counterfeit or unsafe goods from crossing U.S. borders: "This Congress should make sure that no foreign company has an advantage over American manufacturing when it comes to accessing financing," he added.

Innovation

He acknowledged industry concerns that the U.S. is falling behind: "Don’t let other countries win the race for the future," he said: "Support the same kind of research and innovation that led to the computer chip and the Internet; to new American jobs and new American industries".

And he also said he would not "cede the wind or solar or battery industry to China or Germany because we refuse to make the same commitment here".

Energy

On energy there was mixed messages. On the one hand he said he was directing the Administration to open more than 75 percent of potential offshore oil and gas resources. "This country needs an all-out, all-of-the-above strategy that develops every available source of American energy," he said.

But he also talked strongly about public investment in energy technologies, and even though he was referring to gas when he said it, he issued what could be seen as a defiant cry to those who were critical of DoE-backed investments like Solyndra, which go bad: "Our experience with shale gas, our experience with natural gas, shows us that the payoffs on these public investments don’t always come right away. Some technologies don’t pan out; some companies fail. But I will not walk away from the promise of clean energy."

Even though we have heard this kind of rhetoric before, he continued his message on reducing subsidies for oil and increasing subsidies for clean energy: "We’ve subsidised oil companies for a century. That’s long enough. It’s time to end the taxpayer giveaways to an industry that rarely has been more profitable, and double-down on a clean energy industry that never has been more promising. Pass clean energy tax credits."

And finally, in a dramatic gesture, he promised that he would deliver a massive uptake of clean energy on public lands:

"There’s no reason why Congress shouldn’t at least set a clean energy standard that creates a market for innovation. So far, you haven’t acted. Well, tonight, I will. I’m directing my administration to allow the development of clean energy on enough public land to power 3 million homes. And I’m proud to announce that the Department of Defense, working with us, the world’s largest consumer of energy, will make one of the largest commitments to clean energy in history - with the Navy purchasing enough capacity to power a quarter of a million homes a year."

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Comments

STAFFORD WILLIAMSON said

02 February 2012
Not only is this article an excellent summary of the President's pronouncements on energy, it also makes fairly obvious the dilute effect of an all-things-to-all-people political speech. That is not to say it was not a fine, even somewhat inspiring speech, but despite statements like, "Some technologies don’t pan out; some companies fail. But I will not walk away from the promise of clean energy," trying to frame the military as the "world's largest consumer of energy" as making a strong commitment to renewable energy with, "enough capacity to power a quarter of a million homes a year," which by my (possibly highly inaccurate) estimates amounts to a pitifully small contribution to an entire industry from the world's largest consumer of energy. On the other hand, the admonishment to congress to, "Pass clean energy tax credits," may actually have some effect, but also is not nearly as important as creating legislation that guarantees an expanding market through RFS and RES mandates. For all the cheerleading from President Obama, I say, "thank you." Now, would it really be too much to ask that we see some visionary action toward significant and concrete accomplishments in the transition to, "make sure that no foreign company has an advantage over American manufacturing when it comes to accessing financing," and "a future where we’re in control of our own energy, and our security and prosperity aren’t so tied to unstable parts of the world..." I think the one key strategy to accomplishing all of this is to emphasizing the EXPORT of our green energy technologies to the rest of the world, such that our financing support domestic jobs and manufacturing of the technology, but puts the means of production into the hands of all those other countries (especially developing countries in Africa and the other poorest, least developed regions of the world) so that they too will not be creating such a strong demand for external sources of their energy too. The "object of the game" is not to allow petroleum energy prices to rise to where renewables are competitive, but to spread renewables to the point where the economies of scale make them the CHEAPEST energy alternative. All of the existing petroleum refineries could just as easily be refining renewable (bio) sources of hydrocarbons. It isn't an "anti-petroleum" industrial policy to switch from hauling the product of millions of years of geological heat and pressure on ancient hydrocarbons from half way around the world to simply growing them fresh at home and pumping them directly into the "crude" feedstock storage tanks to get the process started.

Sincerely,Stafford "Doc" Williamson

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